With 119 years worth of experience Kylemore, owners of the Kylemore Cafe chain, should have a better understanding of the changing tastes of the Irish consumer than most. But heritage counts for nothing in the cafe society. Like its storied rival Bewley's, Kylemore has struggled with the challenge of moving from the greasy-spoon and sticky-bun past to the panini and latte present.

Unlike Bewley's, which is now out of the cafe business, Kylemore decided to adapt to the new environment. The question was, how? "We sat down early last year and said we can't just do a sandwich offer or another gourmet coffee offer, " said Kylemore's director of restaurants Amanda Browne. "If we just try to improve our sandwiches we're just doing what O'Brien's or the Bagel Factory and everyone else is doing."

Kylemore is in the process of a 10m revamp of its 12 units. The company is also rolling the American Quiznos sandwich shop franchise, with the first 10 outlets expected to be up-and-running by the end of the year. It has plans to add two other franchises to the mix in the near future.

Kylemore hopes to differentiate itself from its main coffee and sandwich-dispensing rivals by offering hot meals and full table service.

The revamped 'Kylemore' restaurants (the long-standing Cafe Kylemore brand has been ditched) have abandoned the traditional self-service model.

There is a price to be paid, however, for having thai curry or goat's cheese toastie served up. The Cafe Kylemore clientele will find the new menu is pricier. "We would expect our labour percentage to be somewhere between 27% and 30% of costs in a self-service cafe, but with this sort of model you're looking at the high 30s, " Browne said.

The fact that these increased costs will have to be passed on won't be to everyone's taste, she said, judging by the reaction at the three Kylemore outlets which have been upgraded to date.

"We've kept a lot of our customers. We've lost some."

The company is betting that the new offering will win over a new generation of customers who would not have frequented the old Cafe Kylemore.

Despite the sizeable investment, however, it is not expecting an immediate influx of new business. At its newly refurbished cafe in the south Dublin suburb of Rathmines, for instance, the company has seen sales creep up a modest 3% since Christmas.

In a highly-competitive market, Browne argues that Kylemore has to make the investment simply to hold on to its position. Without the radical overhaul, she believes Kylemore would be on a slippery slope. "We'd do the same, at best, for a couple of years and then we would slowly start to deteriorate."

Kylemore is jointly owned by logistics and distribution company DCC and the Hogan family, which founded the Kylemore bakery in 1887. The company had pre-tax profit of 1.5m on turnover of 33.6m last year. The company's accounts do not disclose separate turnover figures for the restaurants, contract catering and bakery divisions.

Browne said that the cafe and restaurants division had sales of "between 20m and 25m" last year.

If the new format is a hit with customers, Kylemore hopes to grow that business across its 12 existing units before expanding into some new locations. Browne said Kylemore already has "one or two" new sites in mind. It is also hoping to broaden its retail offering by acquiring the master franchises for brands that have proved popular in other markets.

The first step on that road was the Quiznos franchise.

Quiznos is similar to its rival US sandwich franchise Subway but, in keeping with Kylemore's "hot food" theme, it focuses on toasted sandwiches and hot rolls rather than cold sandwiches. Kylemore has trialled a Quiznos concession stand at its flagship St Stephen's Green cafe in Dublin and at three of its smaller sites. Browne said the results were promising.

Kylemore has signed up franchisees in Cork and Limerick. It hopes to have up to 10 Quiznos trading by summer, with more to follow if the performance of the initial outlets lives up to expectations.

"We would like another 10 to be open during the financial year but we're not going to mass-produce with Quiznos on every corner, " Browne said. "We're very careful about how we roll this out".

In the meantime, having scouted several countries for new ideas, the company is mulling over acquiring the master franchises for two UK retail brands. Browne said one was an "Asian food concept". It's a long way from fry-ups and sticky buns but the "100 million dollar question" as Browne puts it, is whether Irish customers will acquire a taste for the new Kylemore.